June 24, 2020 / 6:58 PM / 13 days ago

UPDATE 2-U.S. natgas falls to 2-month low on forecast big storage build

 (Recasts)
    June 24 (Reuters) - U.S. natural gas futures on Wednesday fell over 2% to their lowest level since
April on expectations for a big weekly storage build.
    The decline came despite forecasts for a continued slowdown in output and an increase in air
conditioning demand and exports.
    U.S. utilities likely injected a higher-than-normal 106 billion cubic feet (bcf) of gas into storage
last week as the weather turned cooler and the coronavirus pandemic continued to dent demand, according
to a Reuters poll.
    Front-month gas futures fell 4.0 cents, or 2.4%, to settle at $1.597 per million British
thermal units. That was the lowest close since April 2 and puts the contract within a dime of a near
25-year low.
    Refinitiv said production in the Lower 48 U.S. states has averaged 87.7 billion cubic feet per day
(bcfd) in June, down from a 16-month low of 88.2 bcfd in May and an all-time monthly high of 95.4 bcfd
in November.
    But as the weather turns warmer, Refinitiv forecast U.S. demand, including exports, would rise from
84.5 bcfd this week to 86.0 bcfd next week. That was slightly higher than its demand outlook on Tuesday.
    The amount of pipeline gas flowing to U.S. liquefied natural gas export plants has averaged 4.0 bcfd
(41% utilization) in June, down from an eight-month low of 6.4 bcfd in May and a record high of 8.7 bcfd
in February. Utilization was about 90% in calendar 2019.
    On a daily basis, however, LNG exports were on track to rise to a two-week high of 4.6 bcfd on
Wednesday as flows to the Cameron LNG plant in Louisiana hit a record high. That is up from a 14-month
low of 3.6 bcfd last week.
    U.S. pipeline exports were also rising as North American consumers crank up their air conditioners.
    
                                       Week ended      Week ended    Year ago   Five-year   
                                          Jun 19         Jun 12       Jun 19     average    
                                        (Forecast)      (Actual)                  Jun 19    
 U.S. natgas storage (bcf):                +106           +85          +103        +73      
                                                                                            
                                                                                            
 Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days                         
 Two-Week Total Forecast               Current Day     Prior Day    Prior Year   10-Year    30-Year Norm
                                                                                   Norm     
 U.S. GFS HDDs                              2              2            5           7            6
 U.S. GFS CDDs                             210            207          193         188          182
 U.S. GFS TDDs                             212            209          198         195          188
                                                                                            
 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts                                      
                                        Prior Week    Current Week  Next Week   This Week    Five-Year
                                                                                Last Year   Average For
                                                                                               Month
 U.S. Supply (bcfd)                                                                               
                                                                                            
 U.S. Lower 48 Dry Production              88.0           87.9         88.0        90.9         77.5
 U.S. Imports from Canada                  5.8            6.4          6.6         7.2          7.9
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                         93.8           94.3         94.6        98.1         85.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.2            2.3          2.3         2.2          1.9
 U.S. Exports to Mexico                    5.2            5.4          5.2         5.3          4.1
 U.S. LNG Exports                          3.8            4.1          4.5         5.9          1.9
 U.S. Commercial                           4.5            4.4          4.3         4.4          4.7
 U.S. Residential                          3.8            3.5          3.5         3.6          4.1
 U.S. Power Plant                          30.5           37.0         38.4        34.1         31.0
 U.S. Industrial                           21.4           21.3         21.4        21.3         20.4
 U.S. Plant Fuel                           4.3            4.3          4.3         4.4          4.5
 U.S. Pipe Distribution                    1.8            1.9          2.0         1.9          1.9
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    66.5           72.6         74.0        69.8         66.7
 Total U.S. Demand                         77.8           84.5         86.0        83.2         74.6
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.61           1.64                              
 Transco Z6 New York NG-CG-NY-SNL        1.55           1.70                              
 PG&E Citygate NG-CG-PGE-SNL             2.38           2.48                              
 Dominion South NG-PCN-APP-SNL           1.42           1.45                              
 Chicago Citygate NG-CG-CH-SNL           1.52           1.61                              
 Algonquin Citygate NG-CG-BS-SNL         1.68           1.85                              
 SoCal Citygate NG-SCL-CGT-SNL           1.98           2.12                              
 Waha Hub NG-WAH-WTX-SNL                 1.45           1.44                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             24.25          28.50                              
 PJM West EL-PK-PJMW-SNL                26.50          31.50                              
 Ercot North EL-PK-ERTN-SNL             20.00          19.25                              
 Mid C EL-PK-MIDC-SNL                    8.79          20.75                              
 Palo Verde EL-PK-PLVD-SNL              29.50          36.25                              
 SP-15 EL-PK-SP15-SNL                   29.75          30.75                              
 
 (Reporting by Scott DiSavino; Editing by Steve Orlofsky and Leslie Adler)
  
 
 
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